Tag Archives: LBMA

Central Bank Intervention Slams Paper Gold

This isn’t some trader’s “fat finger” accidentally overloading the sell button and pressing “sell.” This is unadulterated BIS/ECB/BoE/Fed sponsored market intervention:

At 4:01 EST, a paper gold nuclear bomb was detonated in the Comex Globex computer system. The graph above is just the August “front month” paper gold contract on the Comex. In that contract 1.49 million ozs of paper gold were dumped into the Comex electronic trading system. Zerohedge is attributing 1.88 million ozs. That would include the selling in all of the paper gold contract months.

But that’s not the entire amount of the paper hit. There would have been a large amount of LBMA gold forward paper gold contracts dumped in correlation with the Comex paper avalanche. ZH attributes $2.2 billion in paper gold dumped.  But the real number including LBMA forwards dumped was much larger.

“The mysterious plunge has the market spooked,” says some idiot named Bob Habercorn from RJO. This was not “mysterious.” It was intentional – a shock and awe market intervention that was intended to “spook” the market. That quote is from a Bloomberg report full of fake news (caution, this article contains fake news:  LINK).

The article claims that China bought less from Hong Kong in May. In fact, the amount of gold exported from Switzerland to India and Hong Kong was up 39% from April, according to Platts. Furthermore, we have no clue how much gold moves into China through Beijing and Shanghai, numbers which are intentionally hidden from the world.

Here’s the reason that today was selected by the BIS et al to attack gold in the paper market in an effort to scare the crap out of the market:

the day was well chosen as the Muslim world including Turkey was closed for the end of Ramadan as was India which has the amiable habit of observing the holidays of religious minorities. – from John Brimelow’s Gold Jottings

Two of the largest buyers of physical gold in the world right now, India + Turkey, were closed for the observance of a religious holiday. And Shanghai closed for the day 31 minutes before the paper dump.

4:00 a.m. EST is one of the slowest, lowest volume trading periods during any 24 hour period. Why would a seller of a large number of contracts sell at that time of day, when the largest buyers of what is being sold are not in the market at the time of the sale?

If it were merely a “fat finger” – the fake news narrative – then the mistake would have been immediately corrected and the price would have quickly recovered.  Anyone who buys the “fat finger” story is either tragically ignorant or hopelessly naive.

When India returns tonight to the market, I would expect gold to get a strong bid.  Indians have a habit of buying a lot more physically deliverable gold than they might have otherwise when the western Central Banks put gold “on sale” by lowering the price in the paper market.  I suspect Turkey and China will increase their appetite as well.

The mining stocks per the HUI barely acknowledge the artificial price take-down.  The HUI is down less that 1%.  In the past, on a day when gold was taken down to this degree, the HUI would have dropped at least 4-5%.   It’s almost as if mining stock traders are laughing at the latest Central Bank antics.  I know I am…

Early Monsoon Season Will Boost Indian Gold Buying

After the concerted western Central Bank  effort, led by the BIS, to squelch Indian gold imports by eliminating the most commonly used currency bills failed, the fake news about Indian gold imports coming from the World Gold Council amplified.  The WGC missed its Q1 2017 forecast for Indian gold imports by a country mile, as Indian gold imports doubled in Q1 to 253 tonnes.   Please note that these numbers do not include the amount of gold smuggled into India, which has been estimated to be 200-300 tonnes annually.

Now the World Gold Council is promoting the narrative that Indian gold imports will average only 90 tonnes per quarter the rest of the year because of a new General Sales Tax scheduled to be implemented on July 1st plus restrictions to be implemented on gold dore bar imports.  However, this is again an ill-fated prediction, likely for the purpose of spreading anti-gold propaganda, which seems to be one of the World Gold Council’s general directives.

First, in April and May, the premiums to world gold paid in India suggest that April/May imports already are well into triple-digits.  And the WGC’s arguments are absurd, as expressed by John Brimelow in his Gold Jottings report:

In JBGJ’s opinion the only way this prediction can be right is if the $US price of gold jumps a couple of hundred dollars. Since Q2 is half gone and premiums have if anything been even more constructive during April and May, imports for the quarter are very likely be deep in triple digits also. The dore point is just ridiculous.  To the extent dore is not available India will just revert to buying kilo bars which are only a few dollars more expensive. How the Authorities will treat the gold trade in introducing General Sales Tax is still uncertain. But using it to increase the rate of tax will just increase smuggling. In any case, fear of a tax increase should be stimulation anticipatory buying, a point the WGC avoids mentioning.

In addition to the current elevated level of gold demand in India, the early arrival of monsoon season to India will further boost demand for gold “by setting up India for higher farm output and robust economic growth” (Economic Times).   Farmers use cash from their harvest sales to buy gold, which is one of the major sources of demand fueling India’s biggest seasonal gold-buying period in the fall through year-end.  The bigger the harvest, the more gold bought by Indian farmers.

For the WGC to forecast 90 tonnes per quarter for the rest of 2017, especially given that Q2 is nearly in the bag and is likely already well over 100 tonnes, is nothing short of motivated anti-gold propaganda.  An increase in the General Sales Tax will likely cause a temporary dip in gold imports.  But, as with sudden moves higher in the price of gold, Indians will “get used” to paying a slightly higher price and normal import patterns will resume. Furthermore, a higher rate of taxation on gold sales in India will likely stimulate increased smuggling, over which the Indian authorities seem to limited control.

I appears currently that the western Central Banks are having a difficult time keep a lid on the price of gold.  The elevated level of Privately Negotiated Transactions and Exchange for Physical transactions – both of which facilitate settlement of Comex gold contracts off-exchange, privately and out of sight – is an indicator the banks are struggling to settle gold contracts with deliveries from the amount of gold available on the  Comex.   For now the price of gold has been successfully contained below $1300.  But it would not surprise me if gold makes a strong run over $1300 heading into, in not before, Labor Day weekend.

Is Gold Signaling The Next Financial Crisis?

Gold and silver have been sold down pretty hard since April 18th. But the structure of the weekly Commitment of Traders report, which shows the long and short positions of the various trader classifications (banks, hedgers, hedge funds, other large investment funds, retail) had been flashing a short term sell signal for the last few weeks. The net short position of the Comex banks and the net long position of the hedge funds had reached relatively high levels. Except Thursday (May 4th), almost all of the price decline action was occurring after the London p.m. gold fix and during the Comex floor trading hours, exclusively. This tells us all we need to know about the nature of the selling, especially given the enormous amount of physical gold currently being accumulated by the usual eastern hemisphere countries. The table to the right  calculates the Comex banks’ paper gold positioning going back to 2005.  As you can see, currently the net short position and the net short position as a percent of total open interest has reached a relatively high level. This typically happens when the banks engage in raiding the Comex by unloading massive quantities of paper gold in bursts in order to trigger hedge fund stop-loss selling. It serves the dual purpose of pushing down the price of gold and providing a relatively riskless source of profits for the banks.

This is the cycle that has repeated numerous times per year since 2001. This time, however, more than any other time since 2001, the sell-off in the price of gold is counter-intuitive to the collapsing financial and economic condition of the United States, specifically, and the entire world in general. The likely reason for the current price take-down of gold is an attempt by the elitists to remove the batteries from the “fire alarm” mechanism embedded in a rising price of gold. An alarm that lets the populace know that there’s a big problem that will hit the system sooner or later; an alarm that lets the public know systemic failure is beyond Government and Central Bank Control.

A similar manipulated take-down of the price of gold and silver occurred in the spring of 2008, ahead of the great financial crisis. Gold was pushed down to $750 from $1050 and silver was taken down from $20 to $10. This price decline was counter-intuitive to the collapsing financial condition of the U.S. financial system, which had become obvious to anyone not blinded by the official propaganda at the time. Of course, after the financial collapse occurred and was addressed with money printing, the price of gold ran up to an all-time high.

It’s likely that a similar situation is taking place now. Only this time around all “assets” are in price-bubbles fomented by record levels of fiat money creation and the interminable expansion of credit. The debt portion of this equation is getting ready to hit the wall, the only question is timing. This explains the parabolic move in the price of Bitcoin. Bitcoin is nearly impossible to manipulate. Once the western Central Banks lose the ability to manipulate the price of gold in the derivatives markets, the price of gold and silver will go on their own parabolic price journey – one that will leave the price of Bitcoin in the rear view mirror.

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The CME Extends The Paper Fraud To The Coin Market

On April 11th, the CME and England’s Royal Mint announced that they were testing a blockchain-based platform for trading gold.  The product to be traded is a new crypto-coin called, Royal Mint Gold (“RMG”).  The token will be issued by the Royal Mint and will represent the digitized version of 1 gram of gold.   The gold will be stored in the Royal Mint’s vaults.

This news announcement was surprisingly overlooked by the alternative media, except for Rory Hall at his Daily Coin website:  CryptoGold and Thieving Bankers.  However, the fact that the CME is involved should have set off the smoke alarms throughout at least the segment of the alternative that seeks to shine the light of truth on precious metals trading and ownership.   This is because the concept of a “new alternative way to trade gold” is an extension of the “fractional gold and silver bullion market” that is driven by the paper derivative precious metals products traded on the Comex and the LBMA.

The truth is that this new “blockchain-based” technology is nothing more than a mechanism to divert investor money away from taking delivery of actual physical gold and silver in the form of Royal Mint bullion coins and LBMA bars, thereby removing the availability of physical gold and silver that can be used for hypothecation.  Furthermore, the new  product is an extension of the institutional-level fractional bullion system that utilizes Comex/LBMA paper gold and silver contracts in order to fabricate the illusion that the buyers of those contracts have purchased legal ownership the underlying bullion bars. Below is an excerpt from the Royal Mint’s website which promotes the new concept:

RMG®, an innovative new product launching in 2017, will provide the investment performance of the London Gold Market with the transparency of an exchange-traded security. RMG holders will negate counterparty risk, by having direct ownership of physical gold bullion where each RMG represents ownership and full title to 1g of physical gold bullion held in the form of fully allocated, LBMA Good Delivery Bars within The Royal Mint’s vault.

We believe these features, coupled with the guarantee of zero ongoing annual management fees and free storage, represents one of the best and cost-effective ways to invest in physical gold today. At any time RMG can be redeemed for physical gold bars and coins produced by The Royal Mint, with physical delivery.

The basic tenet of the RMG is that “counter-party” risk is eliminated because the buyers are purchasing direct ownership of gold that is stored in the Royal Mint’s vault.   However, the idea of custodial possession – where the owner trusts the safe-keeping of an asset with a third party – is in and of itself a primary source of counter-party risk.   The first law of ownership of gold is that you do not fully “own” it until it is in your personal possession. Just ask the German Government.

The second myth in that statement above by the Royal Mint is the gold is held in the form of fully allocated LBMA Good Delivery Bars (in the Mint’s vault).  This is GLD’s holy grail claim as well.  The problem, again, is accountability.  Until gold custodian’s are willing undergo a fully independent 3rd party audit at any time and without advance notice, it’s silly to assume that these custodians possess full, legal title to the gold they are reporting to be in their vaults.   The poster-child example is the U.S. Federal Reserve, which has spent millions to avoid the prospect of a legally enforced audit of its gold vaults by a third party, fully independent auditor.

The Shadow of Truth discusses this new mechanism of deceit in today’s podcast and we explain why it’s riddled with counter-party risk and the potential for fraud on the same scale as Comex and LBMA gold and silver derivative products.

Welcome To The Twilight Zone: Comex Paper Gold And Silver

The following was written by Eric Dubin of The News Doctors:

It’s not an accident that the hit to gold and silver came AFTER the London PM Fix. We’ve got physical gold demand in Asia that is downright explosive (I’ll document this in a separate article later this week because no one has done a comprehensive painting of all of the trends in once place) and the cartel apparently wanted to hit metals as well as push long-term bond yields up and prices down to reflect a fake steepening of the yield curve to help banks improve solvency while sending a fake signal of a strong economy.

The London market is still a large physical settlement market and if this hit came before the London PM Fix there would likely be a large amount of off-take stimulated as Asian buyers scarf-up more physical. What to do? Kick the crap out of gold and silver after the fix, and hope that sentiment is gravely wounded over the subsequent hours and before the next major physical settlement potential of tomorrow’s London PM Fix. When you look at the news headlines for all assets and political issues there’s no good reason for this move other than the coordinated actions and statements in the media by Mnuchin, which was clearly well timed to deal with the ongoing challenge of steering precious metals down, steepening the yield curve to help banks survive because they can make more profit with a sloped yield curve spread to help pad their balance sheet over time while sending a fake signal about a strong economy implied by an upwardly sloping yield curve.

ZeroHedge on the gold hit (and Tyler missed the importance of why this hit came after the London PM Fix): The Read The Rest Of This Analysis Click Here:   Welcome To The Twilight Zone

Will Physical Gold/Silver Demand Prevent A Bigger Sell-Off?

The precious metals market has been under attack for the last two weeks by the Comex banks who have once again built-up an extreme net short position in their paper gold and silver positions.  In fact the open interest in paper silver recently set a new record high, exceeding the previous high set in 2011, when the price of gold was approaching $50.  That it took a record amount of paper silver creation to keep the price of silver below $20  a sense of desperation by the banking cartel in its effort to keep gold and silver “irrelevant” as an investment.

But the price action of the metals is behaving somewhat differently from past cycles when the banks decide to flex their muscles and trample on the precious metals market by bombarding the Comex with thousands of gold and silver contracts in order to disgorge the long positions held by hedge funds and create intermittent “waterfall” sell-offs.

Eric Dubin (The News Doctors) and the “Doc” (Silver Doctors) invited me back on to their “Metals and Markets” weekly show sponsored by SD Bullion to chat about the precious metals, junior mining stocks and geopolitical current events:

If you would like more information about Investment Research Dynamics’ Mining Stock Journal or Short Seller’s Journal, click on either banner below. The latest MSJ features a relatively unknown junior mining stock that could eventually be a 5-10 bagger from its current price (currently below 30 cents) and the new issue of SSJ (published this evening) explains why the housing market is about to follow the retail and auto sales into a recessionary spiral:

Massive Attacks On Gold Reek Of Desperation

The paper silver open interest on the Comex is at all-time highs.  The previous all-time high was 224k contracts when the price of silver was pushing $50 in 2011.  The current paper silver open interest is 229k contracts with the price of silver at $18.  At least the degree of fake silver open interest in silver was more appropriate to the price level at which silver was trading in 2011.

Having said that, the current paper silver open interest is entirely inappropriate relative to the amount of silver reported to be held in Comex silver vaults.  229 thousand silver contracts translates into 1.15 billion ozs of paper silver.  That number represents  about 37% more actual silver ounces produced by global by mining companies in one year.  Compare that paper representation of silver to the actual 193 million ozs of silver reported to be held in Comex vaults, primarily “held” by JP Morgan which is reporting nearly 102 million ozs of silver in its vault.

Notwithstanding whether or not those 101 million ozs of silver are actually sitting physically in JP Morgan’s Comex-designated custodial vault (and much of it has likely been hypothecated), the amount of paper silver issued primarily by Comex bullion banks is nearly 6x the total amount of silver reported to be held in Comex vaults.

But it gets worse.  The amount of silver that has been designated as available for delivery, or “registered silver,” is only 30 million ozs.  In other words, the amount of paper silver issued by the Comex is 38x greater than the amount of silver made available to be delivered to the holders of those silver contracts.

The point here is that the Comex is likely the world’s most fraudulent market. In fact, It’s inappropriate to refer to the Comex as a “market.”  The Comex is nothing but a mechanism by which the Fed, in conjunction with the Treasury’s Exchange Stabilization Fund and the Comex bullion banks, exerts control over the price of silver.

The degree to which the Fed et al has to exert fraud in order to contain the price of silver is reflected by the absurd imbalance between paper silver contracts issued in relation to the amount of the underlying silver available for delivery.   In any other commodity sector this situation would be labeled “criminal.” With silver and gold it’s labeled, “nothing to see here, move along.”

As with silver, the trading patterns in gold reflect a high degree of desperation by the bullion banks to contain the price and demand of physical gold.  Interestingly, right now most of the blatant manipulation appears to be connected to the London p.m. gold fix activity on the LBMA.  We believe it’s evidence of a growing shortage of physical gold available to deliver into India, China and other gold-buying countries.   We explain this view in detail in today’s Shadow of Truth episode:

The next issue of the Mining Stock Journal, released this evening to subscribers, will have new junior explorer idea with 5-10x upside potential. It will also have an alternative explanation to the JNUG suspension of new unit issuance and why this could be very bullish for the sector. You can find out more about subscribing to the MSJ here:   Mining Stock Journal Subscription Info.

Indian Gold Imports In February Tripled

Mehul Choksi, chairman of jewellery store chain Gitanjali Gems Ltd., is quoted as saying: “We expect some heavy buying in April as a large number of weddings are expected to take place. – LINK

Legal Indian gold imports jumped up to 96.4 tonnes in February vs. February 2016. These numbers come from the finance ministry and not the World Gold Council or bullion banks. This reinforces the observations by many that the BIS-directed attempt to curtail Indian gold demand by removing cash from the financial system has failed.  Gresham’s Law in action.   This number also does not include smuggled gold which, based on the increase in airport arrests so far in 2017, has ramped up considerably.

Amusingly, Cititgroup is forecasting total 2017 demand in India to be 725 tonnes.  This number is laughable.  Smuggling alone is thought to account for about 300 tonnes per year of gold going in to India.  As a bullion bank with an untenable paper gold short position, Citigroup can only dream that India’s gold importation will be that low in 2017.

There will be a big “snap-back” effect on India’s gold demand after the brief intervention by the Government in late 2016.  Based on yesterday’s response in the paper gold market in NYC after the Fed’s rate hike announcement, it seems that the western Central Banks/bullion banks are losing control of the bullion market.

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Gold & Silver Manipulation: The Biggest Financial Crime In History

Investment Research Dynamics is pleased to present another truth-seeking missile launched by Stewart Dougherty:

This crime is already 285 times bigger than the LIBOR scandal, and 500 times bigger than Madoff’s swindle. It is, in fact, the largest, most destructive financial crime in history.

According to the mainstream financial media (MFM), the biggest financial frauds in history are the Bernie Madoff Ponzi scheme, with roughly $20 billion in net investor losses, and the Bank State rigging of LIBOR, which resulted in 16 guilty banks paying $35 billion in fines, which supposedly equated to their theft.

The MFM have conveniently ignored a far larger financial crime that has been perpetrated for 37 years and counting, and that has netted its orchestrators more than $1,000,000,000,000.00 ($1 trillion) in stolen profits. This crime is so powerful that it can produce fraudulent proceeds of $1+ billion on demand and in minutes, making it unique in the annals of theft. It is a crime that has been committed literally thousands of times since 1980, and is now being committed in the most blatant and brazen manner ever. This crime is already 285 times bigger than the LIBOR scandal, and 500 times bigger than Madoff’s swindle. It is, in fact, the largest, most destructive financial crime in history.

To read the rest of this, please click here:  Gold & Silver Manipulation

 

Hugo Salinas Price: The World Will Hyperinflate Into A Gold Standard

If one can only see value in paper currency terms, one cannot see value at all

Hugo Salinas Price – website link – posted a couple of comments on Stewart Dougherty’s guest post earlier this week. I concluded that his insights needed to be shared on the front of this blog and he gave me permission to edit them together to make them easier to read for everyone.  “I know my comment was complex but I wanted to condense the thoughts I have developed over three decades:”

I would like to take this chance to share a few of my thoughts on this. To me it is pretty clear that the American gold is encumbered. Not because of the usual reasons found on the web but because America defaulted on its gold under the Nixon administration. There are still, many foreign claims on that gold.  If America starts to use that gold officially, the gold vultures, like the bond vulture funds, will be out en masse and with force.  So it is in America’s best interest to ignore that gold – and gold in general.

The world has (finally) realized that a country with the reserve currency is not something a country should want and that the dollar can fail. The danger is that it will fail to soon. That is why the euro was created for example. The currencies from the individual countries were all issued from the US treasury.  Meaning that if the dollar went the way of the dodo, the European currencies would die with it. Enter the euro, issued from gold [the euro was originally partially backed by gold].  The gold held by the ECB is priced on a mark to market basis. You can check the website of the ECB, its number one asset is listed as gold and, sadly, gold receivables [meaning that gold is leased out].  Most of the Eurasian landmass followed this initiative [pricing Central Bank gold on a mark to market basis] – for instance, the BRICS countries.  All that is needed a rebalancing of the gold holdings of major countries. Enter China. They had way too little gold and way too many dollars. But last year they also started to mark their gold holdings to market.

Seems to me the world is ready to hyperinflate into gold.  After all, all currencies have already hyperinflated in the financial world.  When the run on real things happens, as a system operator, you don’t want that since a functioning printing press is worth way more than gold. So you want to guide the hyperinflation into a useless metal and use this gold to help equalize the tradeflows. They cannot implement a global political & economic system when things are unstable because it will fail again and soon.  Just as all reserve currencies did since late 1400.  If I were in the position of the globalists, I would aim for the Roman model. Split the money concept. Currency for spending and settling debts but use gold and silver as a final debt extinguisher.  This would function to prevent the kind of mess the EU countries are now  in. The debts of the south are the assets of the North. This is a recipe for disaster.

Let me elaborate on why I think that the world is ready to hyperinflate in gold terms. The Western public will not hold an asset that goes nowhere, at least in currency terms. The public in the East were never fooled that way. Some  – I think rightly – joke “if one can only see value in paper currency terms, one cannot see value at all”.  I also think gold is wealth and not money. Gold has always been funny in that way. So many people worldwide think of it as money even though its supply tends to dry up as the price rises.

First the Comex will be thrown under the bus to destroy the paper leverage (price suppression) game. Maybe the LBMA as well though I would not be surprised as well if it’s allowed to stay alive. Then the prices can rise and the message will sent:  “gold is the new wealth reserve to balance trade imbalances and then the Western hyperinflation will be killed.”  Central banks lose most of their gold reserves (and that is good) and gold can do what it did for millennia again, settle trade imbalances.

As usual, in historical terms, most of the average people wont have it besides a few grams. But it will be people, not institutions that control it and will help to create a decentralised counterforce to the centralized system we live in that is hopelessly out of touch with reality.

A last thing, courtesy of JS mineset, of the countries that value their gold on a  mark to market basis (a few others may have followed since this graph was created: